Yen weaker after G7 meet
The Japanese yen weakened on Monday, apparently despite a conscious effort by officials of central banks to make statements in support of the Japanese currency. The official statement at the end of this weekend’s G7 meeting did not specifically mention the yen, but only said that “greater flexibility” in exchange rates would be a good thing. The statement mentioned only specifically mentioned China’s currency. Analysts were generally of the opinion that the attempt to talk up the yen failed because a Japanese interest rate of just 0.25 percent isn’t enough to justify increases in the currency.
In midday trade in New York, the yen had dropped 0.2 percent in relation to sterling to ¥221.43, and was down 0.3 percent to ¥117.96 versus the US dollar after going as low as ¥118.28 earlier. In addition, the Japanese currency fell 0.4 percent to ¥149.46 against the euro and declined 0.5 percent to ¥88.92 versus the Australian dollar.
The euro was slightly stronger against both sterling and the greenback, to $£0.6748 and $1.2672 respectively, after a member of the European Central Bank’s governing council said that there is a danger of rising inflation in the Eurozone. However, the Hungarian forint was 0.4 percent stronger versus the euro to Ft270.89 even though it was revealed that the Hungarian prime minister had admitted to lying in order to win an election in April.
The US dollar, meanwhile, was hurt by news that the current account deficit in the US was up more than had been expected, to $218.4 billion, while inflows into the US were at only $32.9 billion in July, only about half of that month’s trade deficit.